Student loans have been of great opportunities to many and yet a disturbing thing to some as well. Understanding every principle behind the student loans, application processes, and the escape roots (also known as Student Loan Forgiveness Programs) would be a wonderful experience.
Varieties of loan programs (borrowing) have often been major funding sources that must families explore to pay for college. There are different types of student loans that you can use.
It has been estimated that student loan debt has been the largest type of consumer debt outstanding other than mortgages – with trillions of dollars in recent years. Significant numbers of borrowers are delinquent or have defaulted on their student loan debt, with an average student loan borrower graduating with nearly $30,000 in debt.
Of course, you wouldn’t want your story to end the same, right? That is the reason Understanding the student loan forgiveness program should be considered important to enable you to know when and if you’re qualified for Student loan forgiveness.
On this page, you’ll be learning more about the types of forgiveness and how to qualify irrespective of several circumstances that may exist.
But first, there is grassroots information to understand before going into in-depth about student loans.
What is Student Loan Forgiveness Program?
The Student Loan Forgiveness Program gives the student an opportunity to get released (in full or in part) from paying back the borrowed amount of loan indited.
Student Loan Forgiveness could also be regarded as a “Loan Discharge” and “Cancellation loan”.
There are several student loan forgiveness programs to qualify for.
There are several programs to qualify from, it all depends on your current circumstances and status. Just like there is more loan forgiveness program for federal student loans than that for private student loans.
More often, the federal student loan and the Public Service Loan are usually the most common loan choice by students and parents. Although the federal student loan works differently from the public service loan – you can apply for loan forgiveness after making a certain number of on-time monthly payments.
Differences Between Forgiveness, Cancellation, and Discharge
Don’t get confused hearing “Student loan forgiveness”, it has been explained in its simplest terms. Then the Student loan forgiveness program can further be used in 3 different contests (as listed below);
Loan Forgiveness and Loan Cancellation: it is called forgiveness or cancellation in a scenario when you are no longer required to make payments on your loans due to your job. these are the general terms of the Student Loan Forgiveness Program.
Loan Discharge: If you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.
Understanding Student Loan Forgiveness
Student loan forgiveness can be forgiven if it is a student loan forgiveness that generally applies to government-issued or government-backed loans. You can see the list of Student Loan Forgiveness Programs – clicking each of these loan programs will take you to a more elaborated page for better understanding.
Types of student loan forgiveness and discharge programs
This is the complete list of the federal student loan forgiveness and discharge program in the United State.
- Income-Driven Repayment Forgiveness
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Perkins Loan Cancellation and Discharge
- Borrower Defense to Repayment
- Closed School Discharge
- Discharge in Bankruptcy
- False Certification Discharge
- Total and Permanent Disability Discharge
- Unpaid Refund Discharge
- Discharge Due to Death
The student loans eligible for a forgiveness program
There are usually common questions that arise among the borrowers, and that is; “Who is eligible for student loan forgiveness?” and “How to be eligible for student loan forgiveness.”
Following the information on this page has well explained how each disturbing question goes.
How to Qualify for the Loan Forgiveness
Qualifying for student loan relief is the must priority for borrowers. And recall that this will be the second (possibly third) time it is mentioned on this page that “loan forgiveness applies only to federally held student loans, not private loans.“
Yet the intriguing thing is that not every federal loans borrower still qualify for forgiveness. reasons being that;
- Exemption of the top 5% of incomes in the United States. That means if you make more than $125,000 individually or $250,000 for a married couple, you do not qualify for this program.
- private student loans are also not qualified for the student loan forgiveness program. However, refinancing the loan would be a perfect option by opting for a lesser loan rate to refinance the current private loans.
How to apply for student loan forgiveness
As a borrower, there is an opportunity for you to apply for loan relief – you can possibly get up to $20,000 forgiven. requirements for application of student loan forgiveness differs, depending on the platform you apply from. However, generally, you’ll need to provide your full name, Social Security number, date of birth and email. And most applications are carried out Online (website).
Application is carried out online – through the channel the Department of Education (DOE of the United State) has launched, you can start your application as a borrower.
Not much information is required though. The application is usually available in both English and Spanish.
>>> Go to the official portal to access the Federal Student Aid (FAFSA®) free application form to apply for financial aid for college or graduate school here.
The simple form asks for your:
- Social Security number
- Date of birth
- Phone number
>>> Before submitting the application, you’ll need to type your electronic signature and check a box certifying “under penalty of perjury” that the information you provided was true.
>>> Submitting it means that you’re applying for loan forgiveness, meet income and other eligibility guidelines and will provide proof of income if requested.
>>> After applying, borrowers should receive loan forgiveness within four to six weeks. If you apply by Nov. 15, for instance, you could see loan forgiveness by the end of the year.
Accepting your federal or private student loan
Login to your account portal to know how much you owe, known who your student loan servicer is, and what’s your interest rates.
If you are an undergraduate student, you need counseling to help you understand the terms and conditions of your loan, as well as your rights and responsibilities. You need to complete it before funds will be disbursed to your school.
Once your paperwork is completed and you accept your loan terms, your school will then schedule your disbursements.